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WAGR introduces social media focused sports betting app

Alexis Ohanian, Founder of Seven Seven Six and Mario Maleve, CEO and founder of Wagr, joined Yahoo Finance Live to break down developing a social media-focused sports betting app.

Video Transcript

[MUSIC PLAYING]

JARED BLIKRE: The House always wins, but does it? What if there was no house? Well, a new sports betting app called Wagr, they are building what they call an inclusive social sports betting app. And they're announcing today a $4 million funding raise led by Alexis Ohanian, 776.

And for that, we have Alexis Ohanian, 776 founder, co-founder of Reddit as well, along with Mario Malave. He is the Wagr CEO and founder. We'll get to the seed funding in a minute here but this is a really interesting concept to me because you take out the middleman kind of. I assume you collect a fee but not the house as it's traditionally presented, right?

MARIO MALAVE: That is correct. So since 2018 since sports betting was legalized in this country there's been a multitude of options that have come out there in the market but they all have three things in common. The first one is that they only pit you against the house. So the house only makes money when the user loses it.

The second is that they're not particularly intuitive. So they're not very inclusive to new users. And the third one, which is a big misstep in the industry is that they primarily have been catered and marketed to men, which we think is fundamentally a big mistake. So we're trying to change that. We're very energized to do so and trying to as you said, build something more inclusive that anyone can use, all sports fans, not just gamblers.

SEANA SMITH: Alexis, what was it about Wagr that caught your attention?

ALEXIS OHANIAN: Well, candidly, I was just happy to get these friendly wagers out of my group chat and into a proper app because I was tired of chasing down my friends for their Venmo payments when I beat them. I mean, like I think like a lot of people wagering is not, it's not a profession. I don't consider myself a gambler but my friends and I really enjoy just the thrill of talking trash and backing it up with a few bucks.

And it was funny, as someone who was pretty early in co-founding Reddit to social media and to the power of community, it was just surprising to me that no one until Mario and his team had thought about how to make this into a truly social product. And it was pretty darn compelling.

JARED BLIKRE: Yeah, this is one of those ideas that you immediately say, I wish I would have thought about, why didn't that exist already? But Mario, could you give us some examples of the different types of wagers that could be made in the social context? And I remember stories about Michael Jordan and Scottie Pippen, legendary betters and gamblers back in the day. They'd be sitting at a crowded airport and they say which of these two people is going to get over there the first, bet 10,000 on it, something like that maybe?

MARIO MALAVE: Initially, we're focusing on all major sports. And if you think about what we're building, it has some connotations of the marketplace. So we're being very intentional and slowly increasing the amounts of bets available on the platform. So from the get-go from launch, you'll be able to pretty much bet on outcomes of games, so point spread bets as they're known in the industry but fairly quickly and we'll start rolling out all sorts of different options. So money lines, the ones that you just referred to are typically called prop bets, so anything about a game, will Jordan score the next point, will a certain hitter perform well at-bat in the next iteration, and things that are closer to live betting. But we're starting simple and increasing the bet variety as we go.

SEANA SMITH: Alexis, I want to switch gears here just a little bit since we have you, another one obviously your very successful initiatives was the co-founder of Reddit and I want to get your thoughts because we've been talking so much about the rise of meme stocks and the rise of really the retail trader. Clearly, Reddit is at the center of all of this with some of those names like GameStop, and AMC, and Clover Health, the list goes on. I'm curious just to get your thoughts on this and the rise that we've seen over the last couple of months of the retail trader.

ALEXIS OHANIAN: Well, look, what you're seeing is a much larger trend here. It is the intersection of community and capital. It's the intersection of social media and finance. And 15 years ago I was starting Reddit from my dorm room and I don't even know how you would have executed a trade, maybe with an Etrade account, I imagine there were still people picking up phones to do it back then. At the end of the day now, the user experience, and that's the story of all this, the user experience keeps getting better and better and better for consumers. And so naturally, consumers are going to gravitate towards things that are delightful. And then they also have things at their disposal they never did before, which is real-time communication with their friends frankly, with even total strangers with whom they have friendships.

And so I really believe I'm making big investments in this space in companies like Wagr because I believe we're going to see in the next 10 years, a whole other architecture for finance that's built around community engagement. And whether it's wagering on a sporting event, whether it is buying or selling trading cards as easy as stocks, like I'm actively looking to invest in these places because I think what we're seeing on Wall Street with these quote-unquote "meme bets" it's not going away. More and more people are just going to be coming online, more and more people are going to be engaging in everything from investing to wagering. And I'm excited to see more and more platforms that are building it intentionally.

You heard Mario talk about this like this isn't for gamblers, this isn't for making sure the house wins, this is about giving everyone the opportunity to have a little fun, maybe talk a little trash, and win a few bucks from their friends about something that's delightful. And that's actually shockingly different in a space that's normally been at times downright predatory.

JARED BLIKRE: Alexis, I want to ask you about your Ethereum endorsement, which I believe you made a few days ago or recently.

ALEXIS OHANIAN: Yes.

JARED BLIKRE: What are you seeing in cryptocurrency right now and also the DeFi space that interests you?

ALEXIS OHANIAN: I think I was lucky enough to be one of the earliest investors in Coinbase like seven, eight, nine years ago. So I've been in this space for a while but I've really been impressed in the last two or three years with the amount of software, the amount of technology that's really getting built to facilitate whether it's decentralized finance, you talked about DeFi, or even you collecting NFTs, virtual trading cards on Sorare for fantasy soccer.

Like all of these technologies are showing off what the power of the blockchain can do. I think Ethereum is pretty special. I think you've got a potential here for some programmable money, which means a lot of new technology can be built but we're still in the earliest days of it. We're still a company like Wagr is still built on Fiat but the nice thing is software makes that transition rather seamless.

The most important thing to be doing now if you're building a new business is to be building it with software at its heart because whether it is traditional Fiat or whether it is cryptocurrency, you still got to at the end of the day do it on software and that's where the big winners are going to be.

JARED BLIKRE: Yeah. And programmable money. I kind of like that. You might want to trademark that. Alexis Ohanian, 776 founder, and co-founder of Reddit. Also Mario Malave, Wagr CEO and founder. Thank you for stopping by here.